An objective is the starting point of
business. Every business is directed to
the achievement of certain objectives,
which refer to all that the business
people want to get in return for what
they do. It is generally believed that
business activity is carried on only for
profit. Business persons themselves
proclaim that their primary objective is
to produce or distribute goods or
services for a profit. Every business is
said to be an attempt on the part of
business people to get more than what
has been spent or invested or, in other
words, to earn profit which is the excess
of revenue over cost. However, it is
widely accepted nowadays that
business enterprises are part of society
and need to have several objectives,
including social responsibility to
survive and prosper in the long run.
Profit is found to be the leading objective
but not the only one.
Although earning profit cannot be
the only objective of business, its
importance cannot be ignored. Every
business is an attempt to reap more
than what has been invested and profit
is the excess of revenue over cost. Profit
may be regarded as an essential
objective of business for various
reasons: (i) it is a source of income for
business persons, (ii) it can be a source
of finance for meeting expansion
requirements of business, (iii) it
indicates the efficient working of
business, (iv) it can be taken as society’s
approval of the utility of business and
(v) it builds up the reputation of a
business enterprise.